This thesis explores effective and contextually appropriate means through which manufacturing SMEs can create competitive advantage through design and sustainable Product Service Systems (PSS). The exploration focuses on how design capabilities can be developed and used in non-design led contexts to drive an effective adoption of sustainable product service systems, creating competitive heterogeneity. A comprehensive review of literature gave understanding of perspectives to competitiveness issues, how organisations have been supported towards PSS, sustainability and design adoption and related challenges. From this review surfaced the need to be cautious of contextual considerations leading to a Delphi study. The purpose of the Delphi study was to identify factors relevant for SMEs in Botswana to embrace sustainable PSS as a competitive business strategy. Priorities from the Delphi study informed a study aimed at exploring competitiveness experiences of SMEs and their perceptions of sustainability and product service systems. Following the position of experts on industries highly prioritised in Botswana s economic diversification agenda, this was done with a specific industry; the leather industry. Possible opportunities of how design can address challenges identified and how PSS and sustainability can open new business opportunities for SMEs were also drawn from the findings. A systems success framework was developed using the main findings. The framework was tested through workshops with 3 SMEs who were also participants in the previous study. Through interactions with designers, the workshops exposed SMEs to design and PSS. Findings from the workshops indicate that through design capabilities SMEs can recognise opportunities and translate them in a service context to differentiated offerings suitable for their various markets. A designerly approach also offered a simplified but holistic process for SMEs to engage in systems thinking.